CARF rules target service providers, while most DAO treasury foundations remain outside reporting scope.
Foundation registrations in the Cayman Islands rise at a rapid pace, driven by Web3 teams searching for clearer legal protections, stronger liability shields, and frameworks capable of supporting complex on-chain networks. New data shows consistent year-over-year growth, a sign that developers and tokenholders prefer structures that reduce personal exposure while supporting operational needs.
Cayman records more than 1,300 active foundation companies by the end of 2024, followed by over 400 new entities created in 2025. Web3 organisations use these vehicles to sign agreements, manage intellectual property, hire contributors, communicate with regulators, and hold treasury assets without placing members at personal risk.
A key turning point arrived after Samuels v. Lido DAO in 2024. A U.S. federal court found that an unwrapped DAO could be treated as a general partnership, exposing participants to liability under state law. Developers and governance stewards reacted quickly and began to establish foundations with separate legal personality, a feature that prevents individual tokenholders from carrying legal burdens tied to protocol actions.
Cayman foundations appeal to projects with large budgets, including treasuries above $100 million, due to tax neutrality, operational flexibility, and familiarity among institutional allocators who interact with multi-chain networks and decentralised teams.
Governments worldwide push to attract decentralised projects, yet legal treatment remains uneven. In the United States, political leaders promote ambitions to become a crypto hub, although only a few states formally recognise DAOs as legal persons. Many projects face fragmented entity rules and inconsistent court interpretations.
Switzerland remains a dominant onshore base for Web3 foundations, with more than 1,700 blockchain firms registered in Crypto Valley and rapid expansion since 2020. Foundations and associations play a central role in organisational design, though teams increasingly adopt multi-jurisdictional approaches to match long-term governance plans.
Cayman adopts the OECD Crypto-Asset Reporting Framework (CARF), with Tax Information Authority regulations entering into effect on January 1, 2026. CARF introduces new due-diligence and reporting duties for “Reporting Crypto-Asset Service Providers,” including entities that exchange assets, operate trading venues, or provide custodial functions.
Providers subject to CARF must collect tax-residence data, track defined transactions, and send annual reports to authorities. Legal specialists point out that CARF applies only to entities engaged in exchange, brokerage, or custody activity.
Foundations that hold protocol treasuries, operate as ecosystem stewards, or manage non-custodial assets fall outside the reporting perimeter under the current interpretation. As a result, many DAO-related foundations retain Cayman’s legal certainty without assuming full regulatory reporting obligations.
As Web3 organisations mature and adjust to shifting compliance requirements, Cayman Islands continues to gain relevance as a hub for decentralised governance structures. Projects value legal clarity, reduced liability risk, and operational design that aligns with multi-chain environments and treasuries measured in nine-figure ranges.
The trend reflects a broader move toward formal legal wrappers, where DAOs and Web3 teams use foundation companies to build resilient governance, engage institutional partners, and manage digital assets with greater procedural security.
